On Thursday, March 3, in this Future Tense event, the Global Assets Project and the Bernard L. Schwartz Fellows Program at the New America Foundation, along with Slate magazine, hosted an event on how breakthroughs in technology can reform foreign aid delivery. In an academic paper and accompanying article on Slate, Jamie Zimmerman and Henry Jackelen of the United Nations Development Programme proposed that foreign aid funds could be directed to programs that delivery aid directly to the poor electronically. Charles Kenny,Bernard L. Schwartz Fellow and Global Assets Project Senior Research Fellow at the New America Foundation, along with Priya Jaisinghani at USAID, and Eric Werker, Associate Professor in the Business, Government, and the International Economy Unit at Harvard Business school, reacted to the proposal and also discussed how technology is transforming global development more broadly. David Plotz, editor of Slate, moderated the event.
Jamie Zimmerman outlined how the electronic delivery of conditional cash transfer (CCT) programs have the potential to break cycles of poverty by providing the poor with an account to save money, whether shocks, and help make long-term investments. She highlighted three major trends which explain why directing foreign add to account-based CCT programs makes sense: the success of current CCT programs and their aptly-documented developmental impacts across a variety of indicators; savings-led financial inclusion; and technological advancements. Henry Jackelen spoke of the history of what is now the Bolsa Família program in Brazil. He emphasized that one of the real revolutions was not only making payments electronic, but that by adding a conditionality to the social transfer, a dialogue began between the government and its citizens to improve those services, like educational services, that the transfer was conditional upon. This creation of demand, leading to pressure to improve government services, has been extraordinarily valuable in state development, he argued.
Charles Kenny spoke of the variety of new technologies that have transformed the developing world, technologies that we might not normally think about: the rubber sole; all-weather roads; plastic containers; and vaccines. He also emphasized that in order to be fully effective, technology has to be supplemented by strengthened institutions and other advances. Priya Jaisinghani emphasized that USAID is considering alternative means of channeling foreign aid, and that getting bank accounts for the unbanked is a major priority. That many of the people we’re trying to reach now have mobile phones, she said, is a very exciting new reality that allows us to think differently about extending new services. She offered the example of Afghanistan, where shifting to mobile phone payments for civil servants would do a lot to reduce the leakages of cash salary payments. Eric Werker discussed how technology is providing ways to achieve the same old development goals more cheaply. Werker highlighted the example of disaster relief aid as one example where foreign governments are distributing aid directly to those in need in developing countries. He also spoke convincingly about the rate of return of direct transfers as, at least in the case of many entrepreneurs, higher than many other forms of development assistance.
Miller-McCune highlighted the event extensively in a recent column, here.